Optimal bid disclosure in patent license auctions under alternative modes of competition

Cuihong Fan, Byoung Heon Jun and Elmar Wolfstetter

International Journal of Industrial Organization, 2016, vol. 47, issue C, 1-32

Abstract: The literature on patent license auctions in oligopoly assumed that the auctioneer reveals the winning bid and stressed that this gives firms an incentive to bid high in order to signal an aggressive output strategy in a downstream Cournot market game, and conversely bid low to signal acquiescent pricing in a Bertrand market game. The present paper examines the information revealed by publishing the winning or the losing or no bid, assuming an oligopoly with differentiated goods. We rank disclosure rules and find that it is not optimal for the innovator to disclose the winning bid, regardless of the mode of competition.

Keywords: Auctions; Innovation; Licensing (search for similar items in EconPapers)
JEL-codes: D21 D43 D44 D45 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:47:y:2016:i:c:p:1-32

DOI: 10.1016/j.ijindorg.2016.03.001

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